Fresh Tomato Industry
Processing Tomato Industry
The United States is one of the world's leading producers of
tomatoes, second only to China. Fresh and processed tomatoes
account for more than $2 billion in annual farm cash receipts.
The U.S. fresh- and processing-tomato industries target
different markets, which is not true in many other tomato-producing
countries. Characteristics of the two industries in the United
States are the following:
- Tomato varieties are bred specifically to serve the
requirements of either the fresh or the processing markets.
Processing requires varieties that contain a higher percentage of
soluble solids (averaging 5 percent to 9 percent) to make tomato
paste efficiently, for example.
- Most tomatoes grown for processing are produced under contract
between growers and processing firms. Fresh tomatoes are produced
and sold largely on the open market.
- Processing tomatoes, which accounted for 89 percent of all
tomatoes produced in 2008, are machine-harvested while fresh-market
tomatoes are hand-picked.
- Fresh-market tomato prices are typically higher and more
variable than processing because of larger production costs and
greater market uncertainty.
Commercial Acreage. Fresh-market
tomatoes are produced in every State in the Nation, with
commercial-scale production in about 20 States. National
fresh-market tomato acreage has been trending lower over the past
several decades. California and Florida each produce fresh-market
tomatoes on 30,000-40,000 acres--almost two-thirds of total U.S.
fresh-tomato acreage (a share that has not changed much since the
1960s). Ohio, Virginia, Georgia, and Tennessee round out the top
six in terms of area planted.
Production. U.S. fresh field-grown
tomato production has trended higher over the past several decades
with the most substantial growth occurring during the 1980s. As
they have for decades, Florida and California annually account for
two-thirds to three-fourths of all commercially produced
fresh-market tomatoes in the United States. Including processing,
Florida is the second-largest tomato-producing State; except for
2008, it has been first in producing fresh-market tomatoes for
decades. Florida's season, October to June, has the greatest
production in April and May and again in November to January.
California is the leading producer of all tomatoes in the United
States, accounting for 96 percent of U.S. processing tomato output
and one-third of the fresh crop. Fresh-market tomatoes are produced
across the State in each season except winter. California's share
of national fresh-market output has remained between 25 and 37
percent since the 1980s. Other major fresh-market tomato-producing
States (in order of importance) include Virginia, Georgia, Ohio,
Tennessee, North Carolina, New Jersey, and Michigan.
Seasonality of Supply. Commercial
fresh-market tomato shipments peak in the spring when Florida's
volume is highest and California and various southeastern States
begin to ship tomatoes. Commercial volume is smallest and prices
are lowest in August to September because of the availability of
local tomatoes. Fresh-market tomatoes are available year-round in
the United States because imports supplement tomatoes grown in
Florida and in scattered greenhouses in the winter. Florida's
winter crop is largely shipped to markets in the East, while the
bulk of Mexico's crop is shipped to western States.
Market Structure. Supermarkets carry
many varieties of fresh tomatoes. Besides displays of the standard
field-grown round tomatoes, shoppers find plum (Roma) tomatoes,
grape and cherry tomatoes, and an array of greenhouse and
hydroponic tomatoes in most areas of the country. Some
greenhouse/hydroponic tomatoes (which were initially imported from
places like the Netherlands) are marketed "on vine" (in clusters)
to convey the appearance of freshness to consumers.
Domestic producers have recognized opportunity in this market
niche. As a result, new or expanded greenhouse/hydroponic
operations in several States have begun production over the last
several years. (Domestic hothouse vegetables, however, are not
included in official USDA annual production estimates, but
allowances are made for them in ERS consumption statistics.)
Some estimates suggest that the U.S. fresh-tomato market is
about evenly divided between foodservice and retail consumer sales.
However, in terms of total consumption from all sources, about 70
percent is consumed at home, with 30 percent consumed away from
home, according to a mid-1990s USDA food intake survey (the most
recent survey with this breakout).
Prices. Statistical analysis suggests
that the retail price of field-grown tomatoes is linked directly to
the shipping-point price. Changes in the U.S. shipping-point price
for tomatoes change retail prices for that month and the next
month. Retail tomato prices include marketing costs such as wages,
transportation, containers, advertising, fuel and power, and
On average, the shipping-point price for fresh field-grown
tomatoes averages about one-fourth of the retail value. This share
has declined during the past three decades, averaging 37 percent in
the 1980s, 31 percent in the 1990s, and 28 percent the first decade
of the 2000s. Shipping-point prices for field-grown tomatoes have
frequently been under pressure since the mid-1990s, largely because
of increased imports and competition with hothouse products.
Trade. International trade is an
important component of the U.S. fresh-market tomato industry.
Imports account for about one-third of U.S. tomato consumption, up
from one-fifth in the early 1990s. The percentage of U.S.
fresh-tomato supply that is exported has slipped to about 6 percent
this decade after having been a relatively constant 7 percent since
Over the past decade, greenhouse/hydroponic products have made
significant inroads into the U.S. fresh-tomato retail market.
Imports from Canada's hothouse tomato industry peaked in 2005, but
have weakened with rising competition from Mexico. Mexico has
invested heavily in protected culture of vegetables, resulting in a
larger share of the U.S. import market. Mexico now accounts for 71
percent of the U.S. import market for greenhouse tomatoes, while
Canada's share has been reduced by half to 27 percent.
Florida and Mexico historically compete for the U.S. winter and
early spring market. Imports from Mexico tend to peak in the winter
when southern Florida is the predominant U.S. producer. Florida
tomatoes then dominate the market during the spring as Mexican
production seasonally declines. Mexico remains the primary source
of U.S. tomato imports and has rebuilt market share lost earlier
this decade by shifting more heavily into greenhouse/hydroponic
products. Greenhouse tomatoes, in fact, have taken a greater share
of the U.S. fresh-market tomato industry. About three-fourths of
U.S. fresh tomato exports are shipped to Canada, with exports to
Mexico a distant second. A small volume is also exported to
Japan--a market that was closed to U.S. shippers by phytosanitary
restrictions (tobacco blue mold) from 1951 until 1997.
The U.S. Department of Commerce suspended an antidumping
investigation involving fresh-market tomatoes from Mexico, by
negotiated agreement, on November 1, 1996. The agreement set a
minimum price (called the reference price) that covers the majority
of fresh-market tomatoes imported from Mexico. The agreement's
intent is to ensure there is no undercutting or suppressing of
fresh-market tomato prices in the United States. Fresh-market
tomatoes cannot enter the United States at less than the
established reference price. Later amendments clarified and
expanded original provisions. The tomato season is now split into
two periods--each with a separate reference price. California and
Baja, Mexico, are covered from July 1 to October 22 ($4.30 per
25-pound box), while Florida and Sinaloa, Mexico, are covered from
October 23 to June 30 with a higher floor price ($5.42 per 25-pound
box). The latter floor price was put into effect upon
review/renewal of the suspension agreement on January 22, 2008.
Per Capita Use. In terms of
consumption, the tomato is the Nation's fourth most popular
fresh-market vegetable behind potatoes, lettuce, and onions.
Although stabilizing in the first decade of the 2000s, annual
average fresh-market tomato consumption remains well above that of
the previous decade. Over the past few decades, per capita use of
tomatoes has been on the rise as a result of the enduring
popularity of salads, salad bars, and bacon-lettuce-tomato (BLT)
and submarine (sub) sandwiches. Perhaps of greater importance has
been the introduction of improved tomato varieties, heightened
consumer interest in a wider range of tomatoes (such as hothouse
tomatoes, grape tomatoes, and specialty/heirloom varieties), a
surge of new immigrants who eat vegetable-intensive diets, and
expanding national emphasis on health and nutrition.
Commercial Acreage. Over the past
several decades, the processing-tomato industry has been moving
westward. California accounts for about 94 percent of the area
harvested for processing tomatoes in the United States--up from 87
percent in 1990 and 79 percent in 1980. Texas, Utah, Illinois,
Virginia, and Delaware once harvested thousands of acres, but today
they have little or none.
Production. California has long been
the primary source of U.S. processed-tomato products. By itself,
California leads the world in the production of processing
tomatoes. Harvest of the California processing-tomato crop is most
active August to September. About 96 percent of U.S. processing
tomatoes are grown and processed in California, with Indiana, Ohio,
and Michigan accounting for most of the remaining production.
Market Structure. Growers contract
with processors to process red-ripe tomatoes. Although many firms
manufacture pulp-based products, such as stewed and diced tomatoes,
most initial processing is by firms that manufacture tomato paste,
a raw ingredient. Paste is manufactured and packed in bulk
containers--large bags set into boxes and barrels--and stored for
use up to 18 months later. This raw ingredient is distributed under
contract or sold to remanufacturing firms that add water, spices,
etc. to make retail and foodservice packs of soups, sauces, catsup,
In the past, many firms made paste and also remanufactured this
paste into other products. The industry appears to be polarizing,
with several firms specializing in the manufacture of bulk
industrial paste and others specializing in the remanufacture of
industrial paste into consumer products. Several California firms
are also producing various dried and dehydrated tomato products,
such as whole dried tomatoes and tomato powder.
Trade. Exports are becoming an
important component of the U.S. tomato-processing industry. During
the early 1990s, the United States became a net exporter of
processed tomato products and has remained so. About 8 percent of
processed-tomato product supply was exported from 2000-08, up from
5 percent during the 1990s and 1 percent during the 1980s. Top U.S.
export markets include Canada (which takes about half of all
volume), Mexico, Japan, South Korea, and Italy. Generally, tomato
sauces account for the largest share of exports, followed by paste,
catsup, and canned whole products.
About 6 percent of the tomato products consumed by Americans
today are imported. During the 1990s, imports averaged about 4
percent of consumption, down from 7 percent during the 1980s. In
most years, Canada has been the largest exporter to the United
States, accounting for more than 40 percent of imported
processed-tomato products--mostly catsup. Other important sources
of tomato products are Italy, Mexico, China, and Israel. In years
with short crops, tomato paste can account for a significant share
of import volume. However, sauces and catsup are usually the top
Per Capita Use. Americans
consume three-fourths of their tomatoes in processed form. U.S.
consumption of processed tomatoes began a steady climb that
accelerated in the late 1980s with the rising popularity of pizza,
pasta, and salsa. ERS estimates suggest the largest processed use
of tomatoes is in sauces (35 percent), followed by paste (18
percent), canned whole tomato products (17 percent), and catsup and
juice (each about 15 percent). ERS estimates suggest that about
one-third of all processed-tomato products are purchased away from
home at various foodservice outlets (pizza parlors, for